The stock markets opened the week on a strongly positive note, with the Sensex and Nifty 50 rising as much as 2%, after most exit polls on Sunday predicted that the Bharatiya Janata Party (BJP) is all set to return to power in 2019. The National Democratic Alliance (NDA) is projected to win over 300 seats in the 543-member Lok Sabha. But there is always a question mark on the accuracy of these exit polls and, hence, market volatility this week can’t be ruled out.
If you are a stock market trader, here are seven stocks you should focus on ahead of the Lok Sabha election verdict on 23 May:
State Bank of India: Shares of SBI, along with other public sector banks, would be under focus. The current BJP government has helped public sector banks sort their mess with the help of the National Company Law Tribunal (NCLT) as well as by recapitalizing them. A new government and a change in policies may adversely affect the stock price movement of PSU banks.
Reliance Group: Reliance Group stocks will be in focus after Congress chief Rahul Gandhi's direct attack on Anil Ambani in the Rafale aircraft deal during the election campaign. Reliance Group stocks may come under pressure if the Congress gains some muscle on the counting day on 23 May.
Adani Group: Adani Group stocks have performed well whenever the BJP government has tasted victory — either in Gujarat assembly elections or Lok Sabha elections — because of the perception that the group is close to Prime Minister Narendra Modi. Stocks of three listed firms of the Gujarat-based Adani Group had soared up to 17% on the day of counting of votes during the 2014 Lok Sabha elections.
Oil marketing companies: The financial performance of downstream oil companies depends much on how petrol and diesel prices are managed. This government has largely stayed hands-off. Any decision to impose subsidy on the petroleum products would be a negative for oil marketing companies like BPCL, HPCL and IOC.
DLF: The perception that DLF is close to the Congress party is widely popular. In fact, the owners of DLF have had strong ties with the Gandhi family that go as far back as 30 years, when Robert Vadra was nowhere in picture. DLF owner K.P. Singh gave Rajiv Gandhi all the credit for reviving DLF and enabling him to create Gurgaon as an international city. All this finds ample acknowledgement in his autobiography ‘Whatever the Odds: The Incredible Story Behind DLF’. So Congress revival on 23 May can also help DLF shares.
Gujarat-linked stocks: Stocks of a few Gujarat-based companies have mostly delivered handsome returns whenever BJP has tasted victory. Shares of Atul, Cadila Healthcare, Fairchem Speciality, Gruh Finance, Maximaa Systems, Symphony, Torrent Pharma, and Vadilal Industries can again jump if Narendra Modi becomes prime minister again.
Surya Roshni: The firm is a manufacturing company with business interests in steel tubes and pipes, lighting, fans and appliances, and polyvinyl chloride (PVC) pipes. The lighting segment is engaged in the manufacture and sale of different varieties of lamps, fittings, fans, appliances and allied items. The stock has risen over 200% since Narendra Modi announced the National LED Programme ‘Prakash Path- Way to Light’ on 5 January 2015 to distribute LED bulbs and decrease power consumption. The stock may continue its positive momentum if the BJP comes back to power.